tv Bloomberg West Bloomberg September 19, 2016 11:00pm-12:01am EDT
>> i am mark crumpton, you're watching, "bloomberg west." the man wanted for questioning in connection with the bombings in new york and new jersey is in custody. he was arrested after being shot and wounded during a shootout with police. authorities say two officers were wounded, but were not believed to have been seriously hurt. the council on islamic relations welcomed his arrest. more than two dozen people were wounded in the blast on saturday night in new york city's chelsea neighborhood. a pipe bomb exploded saturday in seaside park, new jersey prior to a race for marines and sailors. a device exploded at a train station in elizabeth, new jersey
sunday night as a bomb squad robot tried to disarm it. new york city mayor bill de blasio told reporters, "we have every reason to believe this was an act of terror." >> there is no other individual we are looking for at this point in time, and that is very important. second, vigilance is called for. >> investigators say they have, "no indication that the suspect was part of a broader cell." global news 24 hours a day, powered by more than 2600 journalists and analysts in over 100 countries. "bloomberg west" is next. ♪ emily: i'm emily chang and this is, "bloomberg west."
coming up, it is lift off for gopro. shares soar as the company unveils its drone. can oracle take on amazon as the company transitions to the cloud? a co-ceo tells us why he thinks amazon is within reach. highly anticipated new guidelines for autonomous vehicles coming from u.s. highway regulators this week. first, to our lead. gopro stock takes off. they just unveiled a handful of new products, including the consumer drone, karma. the device will go for $800, fit into a backpack, and come with a controller that shows a live feed of the view. they also introduced the latest models of their flagship hero camera line, including a waterproof version. why is this a big deal? the release had been postponed once already, and the hero 4 had been criticized.
gopro shares are down a staggering 80%. analysts had been viewing today's product event as a pivotal moment. i sat down with the gopro ceo after the event, and asked how that jumbled up the business move beyond capturing amateur footage. >> what the thing that gopro is known for is its versatility. the same phenomenon that has benefited the sales of our cameras will also benefit karma. that is our customers buying and using our products to accomplish things that we haven't even dreamt of. emily: talk to me about some of the cases you foresee. >> consumers are going to have a blast using karma to capture their lives in a whole new way, whether it is aerial footage or
handheld footage, or put it mounted to their body while they are skiing or biking. people will be able to capture their lives with such professional quality that they are only used to seeing in film and television. we think we are entering a new era of high-quality consumer generated content. gopro has already won emmy's for their contributions to the television industry, so we expect karma to dramatically improve the quality of footage that film and television producers are able to capture with gopros. karma is so versatile and capable. i think we're going to see people using karma to study shock absorbers in the automotive industry so they can improve the performance of those products. across the board, karma will be used for a ton of interesting applications.
emily: what are your expectations for sales? >> time will tell. i do think karma hits with existing gopro customers. we have millions -- over 20 million gopro's sold since the introduction of our first hd hero back in 2009. gopro is compatible with hero for cameras. we think we have a terrific installed user base that will have a lot of generality and use out of karma, but we think it can expand our markets in professional capture, both in film and television production, and industry as well. emily: there have been concerns that the action camera market is saturated. how is this impacting your
expectations with the hero five? >> the consumers rate of purchasing gopro from best buy and target, the rate that people are buying gopro has never been better. when people say the market is saturating, we just don't see that in our business. this is consumers buying hero 4's that are two years old. and you consider how much better hero 5 is, it has incredible image stabilization built in, there are so many additional benefits to the user that we think they are only going to buy hero five more frequently, so we're feeling good about it. emily: are you worried about more cannibalization?
>> no, because video resolutions are important. it is a tech spec. what a consumer's after when they buy a camera, they are really thinking about the story that they can share, and that is what is so exciting about the new products and services we announced today. gopro is now a storytelling solution. now it enables people to automatically upload those moments to the cloud so that they can access them on their own. using our quick mobile app, they can quickly create a story that they can share. gopro is not just a camera company anymore. emily: there was a lot of buzz around gopro as a media company during the ipo. is that still your strategy, or are you pulling back a little bit? >> our vision remains the same, which is that as we enable
people to more regularly capture and share great stories, so gross our opportunity as an entertainment company. gopro is a brand by the people, for the people, and we think our prospects in entertainment are directly linked to that. when we do our job -- reach our primary vision of helping people capture and share great stories, which i think we unveiled at solution today, the result of that is our customers capture and share so much more compelling content at much larger volumes, and we can aggregate the best of those stories and redistribute those as gopro entertainment. the division remains the same. emily: i have to ask you this
question, about a potential acquisition target that google might be interested, apple, sony. is this something you have given thought to? >> not a lot. we have a terrific vision for the company. if there was an opportunity that dramatically help us accelerate our vision, that might be something that is interesting, but we are doing such a great job of executing against our vision ourselves. we are very sensitive about the future as a standalone company. emily: how many of your products are patented, and have you think ip in general? >> ip is extremely important, and we have a really robust grant. we're filing more patents every year. it is something that a few years ago we relied on, and as we look toward the future and realize how important patent protection was going to be, we invested heavily. we're people inventing incredible solution that gopro. emily: software has been a big kink for gopro. what else are you doing to address that?
>> can you ask the question again? emily: i want to talk about software because this has been a kink in the chain for gopro, and i wonder what you are doing to address that. >> we've done it. we dramatically improved leadership of our software teams and build out teams that are capable of realizing the vision that we have for software, and that is helping people make and edit in minutes or seconds, versus hours. we are really trying to eliminate the desktop computer from the editing equation. we realized our customers want to capture an experience and edit that experience on their phone and move on with their lives are you as you saw today, the fact that gopro's canal auto upload to the cloud, and we have a quick key sd card reader for phones that lets you move your content to your phone late. the different app, in seconds
produce compelling video. we have done it, and it is something we're proud of. i don't think software will be a problem. emily: do you see future applications for gopro and capturing live footage of basketball or football games? that seems like it could be a huge opportunity for gopro. how big do you think that could be? >> we actually are today already enabling some of the most exciting life perspectives and television thanks to hero cast, which is a live broadcast solution that we developed that attaches to a hero camera and provides life perspectives from an athlete helmet or from their chest while they are in skiing competition, a band on stage. hero cast is enabling back today and it is terrific for our brand. emily: gopro ceo nick woodman speaking to us after new product unveiling in tahoe.
we're watching shares of the network control company info box urging more than 50% on monday after announcing it will be bought at a private equity firm vista partners. the deal ends a tumultuous journey for the company this year. in april and activist firm to close the 7% stake in the company. they hired morgan stanley for activist percent soon after. now to our tech revolving door. he will take over the world from staci smith who had already moved into running operations and sales. he comes from general atlantic where he was an operating partner. he was cfo of ebay for nine years. coming up, oracle is doubling down on the cloud, proclaiming, "amazon's lead is over."
bloomberg editor at large spoke to oracle ceo, mark earlier about why the company is making its push. >> because of cloud now, we get a chance to go into what you might traditionally think of the midmarket that we would never have had the opportunity to go into back in the traditional on premise world. you have companies now that have the opportunity to get the best and most advanced technology in the world with no i.t. staff. they donate hardware or software on premise. now some of the companies you see around us here, pandora, lyft, etc., that have started with the technologies straight out of the cloud. >> you talk a lot about having your own cloud. equity one competition with people like microsoft, google, amazon. what do you offer that will put
you head to head with those guys? >> our strategy has been to build a whole suite of capabilities. platform to us is everything from database, everything. we are now really highlighting our infrastructure capabilities, and for us, that means better performance, better security than anybody. >> what does it mean for margin? that is a business where margins are opaque. oracle has had this joy of software margins for so long. >> the major supplier to work out as ourselves. we have a whole set of capabilities that range from processing capabilities, databases, operating systems, so we believe our infrastructure is just as good.
there is a little bit of the issue in clouds that you have to invest before you get revenue. if you went back even two years, our margins were 39% two years ago. we predicted they would start to move toward 80%. in the last quarter, we were at 62%. we invested a lot of data centers upfront, sort of like the hotel business. similar in the cloud business, you put a lot of capital in. >> some other companies have big adjustments where it has been really bumpy. >> for us, in to one which we just closed, icloud revenue grew 16%. that is the way to look at the combination of the two together.
>> what does that mean for maintenance long-term? you have had that's great maintenance revenue stream. the cloud tends to have less maintenance with it. i wonder what that means is you look into the future. >> many of our customers have a support contract today and say i am now going to use that application in the cloud. we're not doing more for the customer. where providing hardware, we are providing all the infrastructure, the data center, the staff. as a revenue would go up. we would go higher because of the additional services we're doing for the customer. the margins would be reflected. a man who works at a company called salesforce, he has done a bunch of acquisitions. >> how do you look at buying overbuilding? >> we do well.
right now we are in access of $5 billion. rmb's spending is not always the best indicator of yield. the best thing about oracle is the yield for r and d is so exciting about the number of products. we have written all our software. we don't build everything, and we have a pretty good mapping of what we build, and we can go to the market and supplement. >> in it for you have other companies buying companies. how high are you willing to go? how you make that kind of decision?
>> we are in the middle of that process right now. we cleared all the regulatory hurdles except the u.s.. once we do that, we will begin. >> as you look forward, do you think there are a lot more deals to do out there for oracle? >> we go through a filter for every acquisition we do. is it a business we can actually run? we go through all of those filters. i never get into any prognostication on m&a opportunities. our history is probably the best predictor of our future behavior. emily: it was our bloomberg editor at large cory johnson with the oracle co-ceo in san francisco. tomorrow, we will be bought talking to oracle's other co-ceo. now to a story we are watching, google is pushing further into
the online travel market with a new app called google trips. the app automatically pulls details about a user's trip from their gmail accounts and recommends restaurants and local attractions. if this is google and more direct competition with review apps like yelp and trip advisor. those lucrative transactions remain in the realm of expedia and priceline. tomorrow on bloomberg, do not miss our conversation with the ceo of new economy. this company is testing a rival service on the streets of singapore. up next, drones flying with the flick of your rest. this gesture control arm band has just picked up some big tech backers. details, next. this is bloomberg. ♪
emily: on today's funding board, a company has just four to $120 million in new funding from amazon. the canadian startup makes an armband that introverts electrical signals in arm muscles to allow users to play games, fly drones, or spectre articles hands-free. it came from a fund that focuses on for the could work alongside its was controlled home assistant. computer projections and headsets where the line between human and computer interaction.
in other store the we are watching, tech industry veterans and the ottawa to ban human drivers from a 150 mile stretch of interstate five. they would like to see that highway as a testing ground for driverless cars. and amazon board member and former microsoft executive are unveiling the plan at a conference on monday. they suggest phasing it in over a decade, starting with allowing self driving cars in carpool lanes and moving up to allowing only self driving cars during peak travel periods. eu competition commissioner comes to washington and u.s. highway regulators care to release highly anticipated guidelines on autonomous cars. we will greet the week, next. if you like bloomberg, check us out on the radio. you can listen on the bloomberg radio out, bloomberg.com and on sirius xm. this is bloomberg. ♪
shares tumble as much 15% with reports that bidders for the airbag makers are mulling the possibility of a bankruptcy notice as they desperately seek 15% with repors for the potential suitors to submit proposals. one million airbags are due to be replaced following the recall that havetive parts been linked to as many as 15 worldwide. hanjin worldwide. hanjin shipping is slipping again. they estimate that they may face penalties around $1.7 billion
but contracts might be renegotiated. ships, 23ed container -- on thesie dollar rose release of the rba september meeting. the central bank left borrowing costs unchanged, and the record low rate is helping with business investment. the governor paid tribute to his predecessors, saying glenn stevens made exceptional judgment during a challenging period. global news, 24 hours a day, powered by over 2600 journalists and analysts in more than 120 countries. this is bloomberg. let's get the latest on the markets. markets are in wait-and-see mode as we wait on not just the bank of japan as it enters its today policy meeting but after
the boj decision we are looking for the fed. unsurprisingly there is quite a bit of risk aversion in this asian session. we have been swinging up for much of the morning and as we take a look at the nikkei we are .1 percent, hanging onto the gains after a morning session that was dominated by these dramatic swings. we should watch out for more volatility when it comes to japanese shares -- jpmorgan came out with a note that said that the bounce we saw will continue to be unwound without action from the boj. elsewhere, australia coming back online after tripping all over itself yesterday with those technical glitches, but they have come back to marginal losses. elsewhere, weakness in greater china, markets having a good day of buying when it comes to shanghai and hong kong, giving
back those gains today, taiwan just turning positive, that market closed higher by 2.8%. weakness out of southeast asia as investors are ahead of the boj. ♪ emily: this is bloomberg west. i'm emily chang. it is time to dive into the tech stories from an center. apple still top of mind this week. with the u.s. senate finance committee reaffirming its opposition to an eu order that apple pay nearly $15 billion in unpaid taxes because of an alleged sweetheart go with ireland. the eu failed to build a case that ireland gave apple illegal state aid. since the ruling, "ran roughshod over the iphone maker." he has been publicly critical of this hearing. he with me to discuss, bloomberg senior executive editor and our reporter who covers apple.
what do we know about this meeting? >> pretty much all they said in the press release. they did not make the case .effectively, this was illegal state aid provided to apple by the irish government. i don't think it's any surprise they come to that can vision because any tax apple has the pain europe, england is not have to pay. it's not that it doesn't want they come to that can vision apple to pay tax, it just wanted to pay tax year. emily: an interesting exchange on twitter between the commissioner herself and an asset manager who tweeted at her. she responds, " i will." >> international politics being litigated on twitter.
what she is saying there is that this is an apple issue, it is not even really a u.s. technology issue. all american companies have gotten very clever in the last couple of decades at minimizing their tax in europe. this is what they do. they either forge unique relationships with countries like ireland. they are very great at creating stateless entities were they funnel all their revenues into a shell company, and sometimes pay. they are not breaking the laws, they are exploiting loopholes. the question is, is incumbent on these companies to act against their own self-interest and pay the tax, or do the countries themselves need to rationalize their statute. emily: what other companies could we be talking about here? google has several different issues going on in europe, and there is talk about picking on facebook's whatsapp and skype. alex: there is also starbucks and mcdonald's.
they came up with a calculation that mcdonald's of 500 million and taxes in one country. one can't possibly gauge how accurate that is. in the tech world, anyone is interesting. one difference you have to make between apple and the others is that apple's deal with ireland was not that it was paying low tax, which is ireland's tax rate, it had a one-off agreement with the country. as far as we know, there are not any others which have that agreement. emily: what about google? brad: certainly. chase and jpmorgan, and almost every american company operating in europe has some form of tax minimization strategy, as you would expect. emily: we will be watching for any headlines out of that meeting. i want to move on to cars.
an interesting post coming from the ceo of lyft about this ring the in a self driving cars, saying that the majority of rides will be in self driving cars by 2021. this on the heels of uber putting the first of driving car on the road. brad: not coincidental that he lays out his vision after uber debuts of pittsburgh. brad: five years seems a little aggressive to me. how they will get there is the big question. uber has gone out and spent money for a company like auto, they have hired folks from carnegie mellon. lyft has an arrangement with general motors. we will see how effective the traditional detroit automakers are pioneering self-serving cars. they have to report to wall street every quarter, so they have less flexibility. he lays out a tremendous vision. he talks about reengineering
cities, but how do companies like lyft and gm get there when they are competing of google which has limitless resources. alex: he is using the elon playbook to hype up his company's potential. we have seen ford talking about their autonomous vehicle on the road, potentially in ridesharing half it he by 2021. in some ways, might expect it is a call for potential partners to team up withlyft. we have had a lot of word coming out of lyft on their attempt to find new partners. i wouldn't be surprised if you place it in the context of this announcement that they are looking to people. emily: what's the latest on that? brad: we don't know. we think their fundraising, and they have talked to a lot of partners, and no deal has
happened. emily: we're expecting new guidelines from the national highway transportation safety administration around self driving cars. we expect some sort of support for autonomous driving, but they have that district a balance with that and safety. what do we know? alex: a lot of it is working out how to approach new ethical questions, for example. do you crash into a person or another car, or do you drive off a cliff? also trying to eliminate some of the legacy issues. i heard that one problem with the screens you might have inside an autonomous vehicle, that is forbidden in some parts of the country because of legislation from the 70's, which meant you could not watch a vcr in the car. brad: we're in the third stage of this transportation revolution. first we had a on-demand taxis,
then we have ridesharing, and there was no direction from the government. let the department of transportation are going to say this week, with caveats is that they see a lot of societal benefits to autonomous car research rolling out these on-demand networks, and i think they will really advocate for research in this area, and they will basically direct states to come. up with a coherent strategy to deal with it that is a lot different than the past. emily: hopefully they are preempting that chaos. thank you, both for stopping by. shares of htc surging 10% in monday trading. the company's biggest gain since may. this is after the company confirmed they are unveiling a new phone on tuesday. they will unveil their desire 10 oh. coming up, how will the london tech scene cope if the u.k.
emily: facebook, citigroup analysts say the company's hot streak will continue. they are raising their price are to $158, implying a more than 20% in. this as analysts and investors rates questions about as growth and competition. london has been working to convince international investors that it is open for business, despite brexit. friday, the u.k. chancellor admitted it was hard
to see how the u.k. could keep its membership of the european single market and regain control over its quarters. we caught up with the deputy mayor of london in his visit to new york, and i began by asking what the mayor's office could do to make london more attractive to startups. >> you say that, but there is an increasing view. a lot of research has been done that london has actually ranked number one to do business. even for startups, it is a very productive place. talking about the office space, incidentally just this afternoon, the mayor and i were at a headquarters here in new york. the founder has announced two new locations that will be opening in london. there is a big change in office space to a shared location office.
those will really make a big difference. there are a lot of other areas in london. it is not just central london, but there are a lot of great areas in london, which have got a lot of talent. we will be focusing on some of those areas. we have to make sure -- the mayor has made it very clear that he is going to be the mayor for all londoners. we need to make sure any growth of london is very inclusive. emily: what about larger u.s. tech companies? the founder about who that has talked about how difficult it is to work in europe because of the regulatory environment. have you see brexit impacting largest companies? >> the regulations have been generally by and large quite different, and it affects different firms in different ways. generally speaking, the regulations have so far benefited. it is a regulator's to protect
the consumers, and make sure that trade is happening in a fair way. of course it will affect different companies in different ways, but by and large, london remains the best place in the world to do business. emily: what his rearview on the eu competition commissioner's investigation into apple? they have ordered apple to pay for unpaid taxes, and there is indication that she could start targeting other u.s. tech companies. >> it is a matter between ireland and the eu. it is not something i would comment on, but i would say this, any company in the world must fully comply with the law and the regulations of the country that they are operating in, and it is important to realize and recognize that the taxes are paid in a very fair
way because they go a long way in contributing to the growth of the country. emily: the london deputy mayor in town from london. thank you so much for joining us. now to a story that is trending. twitter once its users to say more. the company unveiling a long-awaited change to its character limit. as of today, photos, videos," teats will no longer count for the standard limit. the change comes as to their encourages users to be more interactive with multimedia content. lastly, more than 2 million people watched its first livestream nfl game. twitter being sued by a shareholder who claims it misled investors on key growth metrics, specifically in -- executives promising to boost monthly active users to 550 million in the, "intermediate-term," and
more than 1 billion and the longer term. they conceal they had no basis for those projections. as of june 30, the company had 313 million active monthly users. tomorrow on bloomberg, do not miss our interview with the newly named president of brazil. following the impeachment of his predecessor, that is at 5:00 a.m., new york time. this is bloomberg. ♪
startups. >> we launched to see if we could take advantage of what is a missed opportunity by a lot of the venture world, and invest in technology startups with at least one female finder. emily: have you found it is a missed opportunity? >> yes. i think it is. i will start by saying that we have seen over 1000 companies since we launched two years ago. the idea that there are not enough women starting companies is a misnomer. additionally, i think the range of companies and the approach female founders have, they are by nature problem solvers. they start with some aspect of work life, home life, that they think needs to be fixed, and
they go at it. i think they bring a consumer point of view to the party from the start. they are not sitting in a dorm room or some office in silicon valley thinking this would be cool if we made that. emily: what do you think is they are not sitting in a dorm unique about the women in tech problem? women are underrepresented in leadership across the board, but what makes tech different, more challenging? >> i have asked myself this a hundred times. when i started in the media business, you saw very few women in key roles. that has changed dramatically over a couple of decades. i think it is partly because of the way silicon valley grew up, and because of the kind of startups -- it is about the way
the computer industry developed. the fact that early technology companies were really enterprise plays, and they sold mostly to large technology corporations, that i think kept the world of startups pretty limited. it was all engineering majors, computer science majors, and it was a pretty small world. i think it is understandable up to a point. what i still have a hard time with his wider hasn't been more of a change in the past five years or so. emily: what you make a walmart buying jet.com for $3 million? can anyone take on amazon? can a small startup succeed? >> i don't have the answer to that, but i think walmart is
doing the right thing. you can sit back and say they are unbeatable, or you can look for new models that obviously have traction, and tried to take advantage of that, and clearly jet, but failed her nose and was on very well. the last company was bought by amazon. he understands better than most people what the competition is like out there, but he has developed a concept that i think is, and the idea of being able to buy with other people and get great deals as a result, they might be able to build a stunningly business around that. emily: you worked at aol for a long time. what do you think of verizon buying them? >> i think it is a great opportunity.
i think scale matters in this world, and with yahoo! and aol combined, it is a mobile media behemoth, and i think a lot of the customers that aol deals with on a regular basis are excited about having a third option in the world, so i think it is great. emily: as someone who ran brands there for a long time, do you think the yahoo! brand can be revitalized? can it have the cachet it once had? >> i think less about the yahoo! brand overall, but yahoo! has brands that have massive traction, and huge consumer love, whether it is yahoo! finance or yahoo! sports, or tumblr, and i think that is really the way that aol has been moving under 10, to really identify brands people of and
embrace them. i think you will see a lot more of that with the yahoo! purchase. emily: that was susan lyne. 34 years ago today, in a posting on a carnegie mellon bulletin board, it has or severely as known use of an emoticon. the message read i propose that the following character sequence. while this 1982 message was the first, emoticons did not catch on until the 80's and 90's. now they are more popular and very forever, all thanks to that professor. that does it for this edition of bloomberg west. tomorrow, we will pick up the conversation from oracle world with the co-ceo. also tomorrow, our interview with a self driving car company ceo that is testing on the